Publication date: 16 December 2025
Offshore and local licenses in iGaming represent two distinct approaches to legalizing online casinos and betting, each affecting geography, taxation, compliance, and audience trust differently. On 3S.INFO, there’s a concise comparison that serves as a handy reference when choosing your strategy.
There are also special licenses for affiliate marketing. Who needs to obtain them, under what conditions, and what happens to those who choose to operate without a special license — read more on 3S.INFO in the article What is an affiliate license?
Offshore gaming licenses are permits for conducting gambling activities (usually online casinos and betting) issued by regulators in offshore jurisdictions such as Curaçao, Malta, Isle of Man, Antigua, etc.
Such a license formally legalizes the operator’s activity in the issuing country but allows accepting players from other countries (where it is not locally prohibited), often under softer requirements and lower taxes than in the home jurisdiction. In simple terms, it’s a way for an online casino or bookmaker to operate legally according to the offshore regulator while optimizing taxes and compliance requirements, although the recognition and status of such a license depend on the laws of the player’s home countries.
Offshore gaming licenses are issued by dozens of jurisdictions, but there is a ‘classic pool’ most commonly used by online casinos and bookmakers.
An offshore gaming license primarily provides the operator with flexibility, fast launch capability and favorable economics.
The reputation risks associated with offshore licenses are not automatic but significant. They should be taken into account when launching or scaling a project.
Player and Media Mistrust
In many countries, offshore licenses are associated by users with grey or poorly regulated gambling, leading players to fear non-payments, disputed account blocks, and lack of real rights protection. As a result, building long-term brand trust becomes harder, especially if there are locally licensed competitors with clear regulatory oversight and complaint mechanisms.
Banks, Payments, B2B Partners
Some banks, payment providers, and major software suppliers cautiously approach operators with “soft” offshore licenses, considering them high-risk. They may refuse acquiring services, increase fees, or demand stricter compliance measures. This applies equally to large partner brands and affiliate networks: they risk their own reputations if collaboration with an offshore project ends in scandal, blocked payouts, or AML investigations.
Link to Money Laundering and Illegal Sites
Online gambling is recognized as a zone of increased money-laundering risk and criminal financing activity, with even more scrutiny for offshore structures. If an offshore operator does not establish transparent KYC/AML procedures and responsible gaming practices, any incidents (fraud, scams, data breaches) harm not just the specific brand but also reinforce negative perceptions surrounding all projects with similar jurisdictions.
Public scandals involving offshore casinos usually revolve around three themes: cheating players, violating laws and toxic marketing.
Local gaming licenses are permissions for gambling operations issued by the regulator of a particular country or region strictly for operation within that territory. They bind the operator to local rules concerning taxes, product restrictions, advertising, KYC/AML, player protection, and responsible gambling. Unlike typical global offshore licenses, a local license provides access specifically to the legal, regulated market of a given jurisdiction (such as the United Kingdom, Spain, Italy, certain U.S. states).
A local license gives an iGaming project the status of a legitimate operator in a specific market but demands high discipline and expenses in return.
| Pros | Cons |
|---|---|
| Player and Affiliate Trust. A local license from a national regulator (e.g., UKGC, Malta, DGOJ, AAMS, etc.) sends a strong signal that the operator is state-controlled, adheres to fair play standards, responsible gambling, and data protection. This increases CR, LTV and loyalty. | High Entry Threshold and Ongoing Expenses. Significant capital, local company, office, staff, lawyers, and compliance team are required, plus regular contributions, taxes, and audit costs. |
| Access to Banks, Payments and Providers. Operators licensed in a specific jurisdiction find it easier to open bank accounts, connect major payment gateways, obtain content from top providers, and officially appear in legitimate media channels (TV, large platforms, sponsorships). | Strict Compliance and Product Freedom Limitation. The regulator imposes requirements on KYC/AML, deposit limits, bonus policies, offer design, advertising, and promotions. Many aggressive marketing practices and grey mechanics become unavailable. |
| Reduced Regulatory Risks. Operating within local law reduces the likelihood of mass blockings, fines for “illegal activity,” and aggressive campaigns against the brand by authorities. | Limited Geography. A local license typically grants the right to serve players only in its own country/region. Expansion to other GEOs requires new licenses or alternative structures, complicating scalability and raising expansion costs. |
Local and offshore gaming licenses differ significantly across several critical parameters for both operators and affiliates.
| Criterion | Offshore License | Local License |
|---|---|---|
| Geographic Scope | Multi-GEO focus (“global” audience minus restricted countries) | Strictly one market (country/region), service provided to local players |
| Operator Requirements | Softer requirements: lower thresholds for capital, office, staff, and reporting | Higher requirements: strict compliance, technical audit, responsible gambling, regular reporting |
| Speed and Cost | Quick setup, lower license and maintenance costs | Longer process, higher entry and maintenance costs |
| Taxes | Frequently offers low or preferential tax regimes | Full local taxation on GGR/profit |
| Reputation and Trust | Depends on jurisdiction; often perceived as grey or risky option | Higher level of trust among players, banks, payment systems and major affiliates |
| Marketing and Advertising | Fewer direct limitations, but more grey areas and blocking risks in foreign countries | Advertising tightly regulated but allowed in “white fields”: TV, outdoor billboards, local media |
In the iGaming (online gambling and betting) industry, the distinction between offshore and local licenses is a fundamental aspect that defines an operator’s strategy, audience, risks, and revenue potential. A local license is an investment in legality, reputation, and long-term stability within a specific market. It is the choice of large, public companies. An offshore license is a tool for rapid market entry, testing new markets, and operating in regions with underdeveloped regulation. It is associated with high operational and reputational risks. Modern successful operators often employ a hybrid approach, forming a portfolio of licenses based on their strategic market priorities.
An offshore license is issued in jurisdictions with lenient regulation and low taxes (Curaçao, Anjouan, Kahnawake, etc.) and allows for a quick launch and operation with players from many countries, except where it is explicitly prohibited. A local license is issued by the regulator of a specific country or region (e.g., UKGC, DGOJ, US states) and grants the right to operate legally only in that market, provided strict rules on taxes, advertising, KYC/AML, and player protection are followed.
Pros: low entry barrier and quick launch (license obtained in 2–8 weeks), favorable tax regimes, wide geographical reach, and flexibility regarding product and marketing (bonuses, cryptocurrencies, testing new mechanics). Cons: reputational risks, distrust from a segment of players and the media, caution from banks and payment processors, as well as association with money laundering and illegal websites if compliance is poorly implemented.
The most damaging scenarios are mass complaints about non-payments, account blocks after wins, ignored support, and the subsequent “scam casino” stigma in the media and on social networks. Additional harm comes from associations with grey schemes (money laundering, non-transparent beneficial owners) and scandals involving influencers who promoted such projects and became subjects of investigations.
Strengths: high level of trust from players, banks, payment systems, and major affiliates; access to legal media channels; reduced risk of blocks and major fines for “illegal activity”. Weaknesses: high entry barrier (capital, team, office, audit), strict compliance and product/advertising restrictions, as well as limited geography — essentially, one market per license.
White path: Investing in local licenses in key countries for long-term brand development, occasionally complemented by one offshore license for unregulated markets. Grey path: Focusing on growing, weakly-regulated GEOs using an offshore license to quickly gain market share. Black path: Utilizing an offshore license to target strictly regulated countries (e.g., UK players), resulting in blocks, fines, and reputational damage, thus considered inherently risky.
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